Answer: The company will record a depreciation of $375 as depreciation.
We begin by calculating the depreciable value of the asset.


The depreciable value is $12,000.
The useful life of the asset is 8 years from the date of purchase.
So, the depreciation for one year will be
.
Hence the depreciation for one year is
Since the equipment was purchased at the end of September, we can only charge depreciation for 3 months on 31st December.
So, the depreciation expense will be 
Answer:
It should cost $605,183.13 today.
Explanation:
Giving the following information:
Cash flow= $50,000
Number of years= 30
Interest rate= 7.25%
To calculate the present value, first, we need to calculate the final value using the following formula:
FV= {A*[(1+i)^n-1]}/i
A= cash flow
FV= {50,000*[(1.0725^30)-1]} / 0.0725
FV= $4,940,897.47
Now, we can calculate the present value:
PV= FV/(1+i)^n
PV= 4,940,897.47/ (1.0725^20)
PV= $605,183.13
Answer:
A higher operating income will result under absorption costing
Explanation:
If manufacturing production exceeds units sold there will be an increase in inventory and increases in inventory cause income to be higher under absorption costing than under variable costing.
Under variable costing, as its name suggests, only variable production costs are assigned to inventory and cost of goods sold.
Under absorption costing, normal manufacturing costs are considered product costs and included in inventory.
<em>Recognize that a reduction in inventory during a period will cause the opposite effect. </em>
<em>Specifically, a portion of the contents of the beginning inventory would be transferred to expense commensurate with the decrease in inventory. </em>
<em>Since the inventory contains less under variable costing, expect expenses to be lower and income to be higher.</em>
Question: The question is incomplete. See the full question below and the answer.
You are an up-and-coming developer in downtown Seattle and are interested in constructing a building on a site you own. You have collected four bids from prospective contractors. The bids include both a cost ($millions) and time to completion (months):
Contractor Cost Time
A 100 20
B 80 25
C 79 28
D 82 26
The problem now is to decide which contractor to choose. B has indicated that for another $20 million, he could do the job in 18 months, and you have said that you would be indifferent between that bid and the original proposal. In talking with C, you have indicated that you would just as soon pay her an extra $million if she could get the job done in 26 months. Who gets the job? Explain your reasoning. (It may be convenient to plot the four alternatives on a graph.)
Answer:
See the explanation for the answer and find attached of the graph.
Explanation:
So we draw a regression line of Time vs Cost and best fit a curve based on the data given, given in the above figure. The four alternatives are marked in the figure as well. Our main objective is to reduce both time and cost, but that might not be possible So the best thing would be to look for alternatives which lie below the line. If C gets an extra million, then that point would come below the regression line, and it would be a better alternative than D, because for the same time we are getting the job done at a cheaper cost.
Also if B is paid extra 20 million, that point also comes below the regression line, and hence will be a better alternative than A because for the same cost again we are getting the job done earlier. We need to choose between B and C. Now in order to optimise both cost and time, we need to choose a point close to the middle point of the regression line segment in 1st quadrant. We see that C is much more closer to the middle point and hence seems like a better option.
So we choose C as our contractor if we consider B's alternative bid, but if we do not consider B's alternative bid and stick to the original one, we choose B as our contractor.
Answer:
How will these two transactions affect the control and subsidiary accounts?
Explanation:
the control, account.
Accounts Receivable, will be increased with debit of $7,700